How to Protect Yourself When You Private Label

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How to Protect Yourself When You Private Label

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Unfortunately the phenomenon of individuals and companies stealing ideas from each other is not uncommon even in the private label industry. We will discuss several issues and risks with the private label industry in addition to how you can protect yourself from of its pitfalls.

Sign an NDA

When it’s in writing it’s binding. First and foremost it is important that you sign a non-disclosure agreement (NDA) with the manufacturer who you are selling your product to. The non-disclosure clarifies in writing that you and the manufacturer agree upon sharing your ideas related to a specific venue, project, etc between the two of you and not anyone else.

Check To See What They Are Selling

In the private label industry it is important to know, since sometimes contract manufacturers you are working with have their own brand, the name of that brand, and if they sell it and or other brands. There are a lot of manufacturers out there that are only manufacturers and exclusively sell other people’s brands. These are the most ideal companies to work for. If they are selling their own brands or brands to other people it is good to know the names of these brands, where they are being sold to. This will help you get a better sense of the competition out there.

Register

Do you sell your private label brand over Amazon? It is highly recommended to have your brand registered with them. The registry is available to all private label sellers. This means that anyone who creates and sells their own branded products can register. According to Amazon their brand registry exists so private sellers can easily list and manage their own brands products, protected from people editing your listing. The registration process is quick and if you register your brand Amazon will be capable of reversing any listing changes made by an authorized third party.

Give it back!
Give it back!

Other benefits of registering your brand through Amazon include being able to list your products on Amazon quicker and not having to deal with UPCs or EANs. Once your brand is registered the brand related information for your product is displayed automatically. There will be no need to re-enter the same information for the product. This is especially great for products with different variations including specific products that have a parent and child version. Once you register your brand through Amazon you will be able to use other product characteristics to list your product instead of the commonly used UPC or EAN characteristics. The allowed alternative characteristics vary depending on the category of the products.

Pick A Strong Trademark for Your Products and Storefront

Picking a good name is tough. As a seller it is important to give your brand or product a distinguishable unique brand name that is different than other similar products. The brand name should still tell your customers what the product has to offer. This is important so both customers can more easily find your product and you will be able to register your name for federal protection under US trademark law.

Protecting your products trademark is dependent on how distinct it is. The more a trademark describes the products they are applied to the less strong they will be and it will be more difficult for them to enforce against others using similar trademarks.

Related: Advantages To Private Labeling  

Create Arbitrary Trademarks

The best protection your brand can get when selling on Amazon or other online stores is given to more arbitrary trademarks. For example using completely made up words like Google or Kodak or words that have nothing to do with the product (e.g. Apple makes computers not fruits). Customers have no prior connection to the names of Apple products because when they think they want a computer they are more focused on buying the computer and not the fruit it is named after.

In contrast, from a marketing perspective, a more arbitrary trademark may not be the greatest thing in the world in the end of the day. The stronger trademarks we mentioned above don’t provide any description of what the product is (e.g. the name Delta has nothing to do with airplanes or airlines). Unless you are well known, the customer needs to play a guessing game to figure out what the product being sold is. It may be difficult for someone to break into the online store business (e.g. selling their items over Amazon) if your name doesn’t give consumers enough information about your product.

Avoid Generic Trademarks

It is impossible for generic products to have trademark protection. For example if your product has a more generic name like Vitamin C supplements anyone can use these generic names and they cannot be protected under trademark law.

Beware of Counterfeiters 

Unfortunately the majority of even the most successful brands will be counterfeited somewhere down the line. Consumers will usually not recognize the true nature of the counterfeit items they buy. Counterfeit items tend to be poorly made and even dangerous. Customers will often have negative vibes from the counterfeit brand. This may cause them to write a negative review of the real version of this product. If the brand is sold over Amazon this could cause seriously devastating effects for your listings.

Constantly and Consistently Monitor Online Marketplaces

Eyes peeled
Eyes peeled

If people are creating counterfeit versions of your brands they will be selling this brand in the same main online marketplaces you and other online sellers will be selling your products. It is important to constantly monitor the main online marketplace sites Amazon, eBay, DHGate, Global Resources, AliExpress, and Ali Baba to make sure your brands aren’t being sold without authorization. Private label lawyers can be hired to help you make sure your brands are monitored and that enforcement letters are sent when necessary.

Get Your Product Patented

On the Books
On the Books

A strong form of legal protection for your brands specific products, patents are a great form of extra protection. A patent can help prevent you from having a competitor quickly sell the same product you are about to sell before you can do it yourself. Before selling your product through another company, it is important to apply for a utility patent. If this is too expensive you can apply for a provisional patent that is good for up to one year. This gives you leeway prior to applying for a utility patent.

Be Very careful When Accusing Competitors

It is important to be cautious when threatening a competitor of counterfeiting your product or brand. Before accusing a competitor of counterfeit consider that there are thousands of private sellers worldwide. Most analysts predict huge gains for the private label industry in the next few years, and globalization has caused an increase in overseas manufacturing. These factors contribute to fill up seller support departments at pretty much all online marketplaces. These departments are drowning in complaints and appeals. It goes without saying that Amazon and similar online marketplaces have limited time to deal with your specific complaints about someone counterfeiting your private label sock brand. The time constraints make it important to keep your plea that someone has counterfeited your brand or product, as unemotional as possible. Don’t be robotic in your complaint. At the same time don’t add any petty details. Be polite and precise, don’t wax poetic about free speech or federal laws. Your argument should be focused on the specific rules being violated.

These are ten tips to figure out how to best protect yourself when private labeling. Understand that these only touch the tip of the iceberg. It is important to remember that there are many other areas which you need to look out for when selling private label brands and products. Realize though that there are many ways to be most effective in the private label industry.

Thank you for reading! There are many articles you might enjoy at InnovativePrivateLabel. Pieces like Starting your own cosmetic line and Niche Marketing and Why It Works will help give you a much broader is and how to succeed.

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